No.

26 June 22, 2016

The European Union: A Critical Assessment

by Marian L. Tupy

The European Union (EU) is a culmination of a long process of economic and political integration among European
states. The EU started as a free trade area and a customs
union. Over time, it has become a supranational entity that
resembles a federal state and is governed by a byzantine
bureaucracy in Brussels. The EU claims to have brought
about prosperity and stability in Europe, but those claims
are increasingly at odds with reality. Europe is becoming
worryingly unstable and is falling behind other regions in
terms of economic growth. The EU model, which is marked
by overregulation and centralization, seems increasingly out
of place in todays world. What European countries need in
the coming decades is openness, rather than regional protectionism, and flexibility, rather than overregulation from
Brussels. Above all, what European governments need to do
is to reconnect with their increasingly restless electorates,
rather than ignore the latter for the sake of the unwanted
goal of a European superstate.
Introduction
What is the European Union, and what has it accomplished? This is how the EU answers those questions: The
EU is unlike anything elseit isnt a government, an association of states, or an international organization. Rather,
the 28 Member States have relinquished part of their sovereignty to EU institutions, with many decisions made at the
European level. The European Union has delivered more
than 60 years of peace, stability, and prosperity in Europe,
helped raise our citizens living standards, launched a
Marian L. Tupy is a senior policy analyst at the Cato Institutes
Center for Liberty and Prosperity.

single European currency (the euro), and is progressively

building a single Europe-wide free market for goods, services, people, and capital (my emphasis).1
This self-congratulatory assessment of the EUs
achievements is deeply problematic. Consider peace and
stability. The EUs narrative ignores, for example, the roles
played by Germanys unconditional surrender, AngloAmerican occupation of West Germany, the rise of the
communist threat in the East, and the creation of the North
Atlantic Treaty Organizationall of which preceded the
creation of the first and extremely tentative pan-European
institutions. It also ignores the EUs failure to deal with
the Yugoslav crisis in the early 1990s, which was eventually resolved by the application of American military
strength. Moreover, many Europeans see the EU as responsible for the growing instability in Europe. As will be
explained in greater detail below, they see monetary policy
as a source of friction between nation states, with the relatively well-off Germany and Austria on one side, and the
failing Greece and stagnating Italy on the other side. The
same is true of the EUs failure to come up with an effective response to the recent wave of immigrants from the
Middle East and North Africa, thus pitting the generally
welcoming German government against the unwelcoming
governments in Central and Eastern Europe.
Consider, also, prosperity. The role of the Marshall
Plan in stimulating economic growth is, at best, controversial, but omitting it altogether from the EUs narrative
of Europes post-war recovery is self-serving.2 Similarly,
Western European economies began to recover, as was
to be expected, when the war ended and long before the
birth of the first and extremely weak pan-European institu-

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fax: (202) 842-3490 www.cato.org

tions. In fact, Western European economies experienced

their most rapid expansion a decade before the first intraEuropean barriers to trade started to come down. That is
not to say that intra-European trade liberalization was not
beneficial. It was, beginning in the 1960s. In the meantime,
Western Europe benefited from domestic reforms, such as
Ludwig Erhards liberalization of the West German economy in 1948, and the global reduction of tariffs under the
General Agreement on Tariffs and Trade (GATT), which
started in 1947. The official EU narrative tends to omit all
of the above inconvenient facts.
That is not to deny the strong desire for peace and prosperity among European peoples and their leadership after World
War II. Rather, it will be argued that the EU institutions were,
for the most part, ineffectual, and have increasingly become
liabilities. As the example of Switzerland shows, there is no
a priori reason to think that a looser cooperation between
European states is incompatible with peace and prosperity.

mon market and a customs union for the six original EU

members: Belgium, France, Holland, Italy, Luxembourg,
and West Germany. In return for partial liberalization of the
movement of goods, services, people, and capital, the EEC
members agreed to a French demand for central planning
in agriculture, known as the Common Agricultural Policy
(CAP).3 The CAP included price controls and production
quotas that will be discussed, at greater length, below.
Over time, the EEC became synonymous with Western
Europes post-war prosperity. While the two were partially
coterminous, the former did not cause the latter. Research
shows that the post-war boom in Western Europe was a result
of reconstruction and internal economic reforms.4 Moreover,
the positive effects of the reduction in intra-European tariffs
under the EEC cannot be divorced from the positive effects of
the reduction in global tariffs under the GATT. The two were
happening at the same time. Still, even a generous interpretation of the role of the EEC on growth in Western Europe after
1958 must accept that, by that time the EEC was established,
Western Europe was already well on its way to prosperity.
As an example, take West Germany. The West German
post-war recovery started in 1948, when Ludwig Erhard
reformed the currency and removed the Nazi price and
wage controls, which had been kept in place by the victorious allies. The EEC came into effect in 1958 and
intra-European tariffs on trade were not fully eliminated

Brief History of the European Integration Process

The humble origins of the EU date back to the creation of the European Coal and Steel Community in 1951,
which aimed to create a common market for coal and
steel among its member states. The Treaty of Rome, signed
in 1957, took economic integration a step further. The
European Economic Community (EEC) created a comFigure 1
GDP, Average Growth per Decade, Percent (19492008)

Source: Angus Maddison, Statistics on World Population, GDP and Per Capita GDP, 12008 AD, http://www.ggdc.net/maddison/Historical_
Statistics/horizontal-file_02-2010.xls.
Note: *The EU15 figures do not contain data for Luxembourg.

until 1968two decades after the beginning of the West

German miracle.5 The EU and its precursors could not have
been responsible for returning West Germany to growth or
for its economic expansion during the 1950s.
Whatever the salutary effects of the EEC actually were,
they did not last. By the mid- to late 1970s, West German
Wirtschaftswunder, French trente glorieuses, and Italys
il miracolo economico came to an end as stagflation set
in. Far for being credited with Europes post-war prosperity, the EEC was considered a disappointment. It did not,
contrary to popular opinion, upend protectionist policies
among European nations and bring about higher growth.6
The Dooge Report of 1985 called for a fresh start. Under
the Single European Act (SEA) of 1986, the national veto
was replaced with qualified majority voting and European
institutions were tasked with turning the common market
into a truly free single market.7
The Single European Act of 1986 turned out to be a
double-edged sword. The European Commission successfully broke down many internal barriers to trade. As a consequence, trade in goods is now largely free. The EU has
also liberalized the movement of capital, and the Schengen
Agreement, which was incorporated into the EU law by
the Amsterdam Treaty of 1999, greatly liberalized the
movement of people. When it comes to services, however,
protectionism continues to reign. In the early 2000s, Frits
Bolkestein, who was the EU Commissioner for the Internal
Market, proposed the so-called Bolkestein directive, which
would have greatly liberalized trade in services in the EU.
His initiative failed.8 That is particularly disappointing, considering that services account for a majority of economic
output in all EU economies.
The European institutions also used their new powers
to overregulate economic activity. This process gathered
speed after the signing of the Maastricht Treaty in 1992,
which transformed the EEC into the EU. Hundreds of thousands of directives and regulationsdealing with everything from the labor market to the electric power consumption of toasterspoured and keep pouring out of Brussels.9
Today, many EU countries, including its richest and most
competitive members such as Great Britain and Germany,
regularly complain about decrees from Brussels.10 Thus,
while Brussels managed to break down many economic
barriers within the EU, it also made the EU less competitive vis--vis the rest of the world.11
From a humble free-trade area and a customs union
among six Western European countries, the EU has grown
into a supranational entity that governs many aspects of
the daily lives of 508 million people spread across 28
European countries. While lacking sovereign power, the
EU has its own flag, anthem, currency, president (five of
them, actually), and a diplomatic service. Today, the EU is
trying to grasp new powers, while, paradoxically, it is also
facing mounting opposition and a growing probability of
collapse. How did the EU get here?

country has ever become rich in isolation. Unfortunately,

trade liberalization in Western Europe was a slow and
uneven process. The actual benefits of intra-European trade
liberalization are difficult to estimate, because intra-European trade liberalization was taking place alongside global
trade liberalization.13 That process had begun, at the insistence of the United States, in 1947eleven years before
the creation of the EEC.
Over time, intra-EU trade relative to trade with the
rest of the world has grown less, not more, important to
European prosperity. The costs of communications, financial transfers, and transportation have been greatly reduced
since World War II, making global trade increasingly
lucrative. Trade between the United States and the EU,
for example, continues to grow, even though there is no
free-trade agreement between the two.14 Similarly, British
exports to the EU are growing at a slower pace than British
exports to non-EU countries.15
Moreover, the economic benefits of intra-European
trade have been undermined by overregulation. As centralization of decisionmaking in Brussels increased, Western
European growth has declined (see Figure 1). Today,
much of Europe is not growing at all. Some of Europes
woes have nothing to do with the EU and are connected
to changing demographicslow birth rates and an aging
population. Yet Europe has also suffered from a number of
self-inflicted wounds that go beyond overregulation.
The CAP, for example, has resulted in mountains
of butter and lakes of milk. Those were later destroyed
or dumped in Third World markets, where they undermined local producers.16 Accompanying the CAP was
the Common Fisheries Policy that, instead of preserving
Europes fish stocks through a quota system, nearly wiped
them out. One Dutch study found that to maintain their
quotas fishermen tipped two to four tons of dead fish
overboard for every ton of fish headed for consumption.17
The Structural and Cohesion Funds (SCF), a system
of transfer payments that used money from taxpayers in
rich countries to try to spur growth and employment in
Europes underdeveloped south, became a legendary boondoggle of financial misallocation and corruption.18 The
European Court of Auditors has refused to sign off on the
EU budget for 20 years in a rowciting irregularities.19
The euro was supposed to have led to increased growth,
lower unemployment, and greater competitiveness and
prosperity. According to 50 leading economists who
were brought together by the pro-EU Centre for European
Reform, there was a broad consensus that the euro had
been a disappointment: the currency unions economic
performance was very poor, and rather than bringing EU
member-states together and fostering a closer sense of
unity and common identity, the euro had divided countries
and eroded confidence in the EU.20
In retrospect, it should be clear that the Eurozone was
poorly designed. Its members have committed themselves
to maintaining manageable levels of debt (capped at a
maximum of 60 percent of GDP) and deficits (capped at
a maximum of 3 percent per year). What the Eurozone
lacked was a credible enforcement mechanism. Indeed,

Mounting Failures
There is an overwhelming consensus among economists
that free trade stimulates economic growth.12 In fact, no
3

some of the biggest Eurozone members, including France

and Germany, broke their debt and deficit commitments
shortly after the launch of the common currency. Other
countries followed suit.
Worse still, Eurozone membership has allowed some of
Europes worst-managed economies to massively expand
their debt by taking advantage of historically low interest
rates. The markets lent money to Southern Europe, expecting that if problems arose they would be bailed out. The
markets were correct. Thus, when the southern economies
crashed, their creditorschiefly European bankswere
bailed out at a massive cost to the European taxpayer. As
ever, a problem that was created by deeper integration has
led to calls for more Europe and the establishment of a
fiscal union.21
In recent years, another serious problem has emerged:
the mismanagement of mass immigration from Africa and
the Middle East. While immigration can be a force for
good, European countries have been generally unsuccessful at integrating foreigners. Much of that failure has to do
with government policies, such as extensive welfare provisions and labor-market restrictions that keep immigrants
out of the workforce, and some have to do with a particularly European understanding of nationhood, which is
based on ethnicity, not citizenship. Rightly or wrongly, the
failure of Europes immigration policy, which has allowed
for a large influx of foreigners whom Brussels is now trying to forcefully redistribute among the member states,
has succeeded in awakening an epic level of resentment.22
The euro bailout and the mishandling of the immigration crisis have elucidated one of the least appreciated, but
one of the most consequential negative aspects of European
integration: the assault on the rule of law.
Clearly, Article 125 of the Lisbon Treaty states that
each EU member state is responsible for its own debts. It
is inconceivable that the Eurozone would ever have been
born without that vital stipulation, which was necessary to
assuage the concerns of the German electorate. Moreover,
Article 123 prohibits the European Central Bank from
buying sovereign bonds in primary markets and sovereign
bonds in secondary marketsif the latter is done for fiscal,
as opposed to monetary, reasons. Brussels and Frankfurt
have ignored both stipulations in order to keep Greece in
the Eurozone.23
Similarly, the Dublin Regulation specifies that asylum
applications by those who seek protection in the EU under
terms of the Geneva Convention must be examined and processed at the point of entry, which is to say by the first EU
member state that they have arrived in.24 Greece, and to a
lesser extent Italy, have failed to fulfill their obligations and
allowed hundreds of thousands, possibly millions, of asylumseekers to migrate to other EU states, including Germany.
The German government, in turn, has unilaterally decided to
welcome these migrants only to then demand that they be proportionately distributed among other EU countries.
Putting the humanitarian question aside, even the EU
member states which never received asylum-seekers, and
which had no say in letting them into the EU at large,
are now being forced to accommodate them.25 The member

states have responded to the EU threats by breaking with

their Schengen Area commitments and erecting barriers to
keep the immigrants outthus exacerbating the assault on
the rule of law in Europe.
Democratic Deficit
In todays political discourse, democracy is often understood as majoritarian decisionmaking. That view of democracy is problematic, for, as history shows, majorities, too,
can be tyrannical. Majoritarian rule, therefore, needs to be
constrained by separation of powers, checks and balances,
and constitutional guarantees.
But the term democracy has another important meaningthe ability of the electorate to choose and replace the
government through free and fair elections. The choice,
however, needs to be a meaningful one. What is the point
of being able to choose between two or more candidates
if none of them can effect specific policy changes? What
is the point of having a vote if the real decisionmakers are
unelected, unknown, and unaccountable? Those are the
questions that are at the root of the EUs problem with the
democratic deficit.
Over the years, EU member states have ceded a large
number of policy areas, or competences, to the byzantine
bureaucracy in Brussels. Some have been ceded completely,
in which case elected public officials at the national level
have no choice but to implement decisions made in Brussels.
Some have been ceded partially, in which case elected public
officials at the national level are limited in their ability to influence decisions made in Brussels. In both cases, the voters
ability to effect changes of policy through their elected representatives and to hold those representatives responsible in free
and fair elections is rendered meaningless.
The problem of the democratic deficit is compounded
by two inconvenient facts. First, the nation-state remains
the basic building block of international relations, including European. The national identities of European states
have been evolving separately, and often in competition
with one another, for hundreds, sometimes thousands, of
years. The Greeks were first unified by the Argead dynasty
in the 4th century BCE. A relative newcomer, England,
was first unified a thousand years ago and developed a set
of unique institutions, such as parliamentary sovereignty,
which does not exist on the continent.
Second, a pan-European demos does not exist. For a vast
majority of European peoples, being a European remains a
geographical, not a political, distinction. Thus, while European
travelers to the United States may say that they are from
Europe, in Europe they almost always refer to themselves as
being from Britain, France, Germany, or whatever country
they are from. That is likely to continue, because most peoples identities are not formed by attachment to abstract principles such as liberty, equality, and fraternity, but by cultural,
religious, historical, and linguistic ties.26
Bearing those points in mind, it is crucial to realize that
the EU is undemocratic not by accident, but by design.
The proponents of an ever closer union understand that
there is no public support for anything resembling the
United States of Europe. Jean-Claude Juncker, the current
4

President of the EU Commission, summed up the decisionmaking process in Brussels thusly: We decide on something, leave it lying around and wait and see what happens. If no one kicks up a fuss, because most people dont
understand what has been decided, we continue step by
step until there is no turning back.27 When the French and
the Dutch rebelled and voted against the EU Constitution
in their 2005 referenda, they were ignoredand the EU
Constitution, relabeled as the Lisbon Treaty, was adopted
nevertheless.
Is it any surprise, therefore, that while the EU
Commission and the EU Parliament grew in power and
importance, the European peoples interest and participation in EU institutions have steadily declined? When the
first election for the European Parliament was held in 1979,
for example, 62 percent of eligible voters cast their vote.
In every subsequent election, voter turnout has declined. It
reached a nadir, 42.61 percent, in 2014.28

reject immigration from Africa and the Middle East. Calls

for solidarity between European countries are resented and,
increasingly, rejected.30 In the absence of a pan-European
demos, citizens of Germany cannot understand why they
should pay to bail out the Greeks, and citizens of Hungary
cannot understand why they should take in some of the
non-EU immigrants who have arrived in Germany.
Third, many Europeans feel a general sense of malaise
and decline.31 To be fair, the blame for Europes woes does
not rest with the EU alone. The national governments are
also to blame. A growing number of Europeans are frustrated by the failure of the EU establishment and of the
mainstream political parties at home to address low economic growth, high unemployment, mass immigration, and
rising debt. By voting for populist parties, they are lashing
out against the establishment.
Is EU Reform Possible?
The piecemeal amalgamation of 28 distinct cultures,
polities, economies, and histories had proceeded apace
in spite of a growing resentment among the European
peoples.32 That process of unification may well have continued, unimpeded by popular sentiments, had the EU lived
up to its own rhetoric and delivered prosperity and stability to the European continent. Regrettably, it has failed to
deliver either.
Many thoughtful commentators have recognized the
need for EU reforms. Many believe that such reform
should include at least some repatriation of EU powers
back to the nation states. Unfortunately, past experience
with EU reform does not augur well for the future.
In 2000, for example, the Lisbon Agenda committed
the EU to becoming the most competitive and dynamic
knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010.33 Nothing was done to reverse
decades of EU overregulation and the Swedish Presidency
of the EU declared the Lisbon Agenda a failure in 2009.34
The Lisbon Agenda was replaced by a reform program
called Europe 2020. According to the EU Commission
itself, The [2008] crisis has wiped out years of economic
and social progress and exposed structural weaknesses in
Europes economy. In the meantime, the world is moving
fast and long-term challengesglobalization, pressure on
resources, ageingintensify.35 Astonishingly, the document does not mention deregulation at all and the only reference to global competitiveness is in the context of the EU
support for the development of a strong and sustainable
industrial base.36 This is a thin gruel indeed!
In fact, the EU has shown itself incapable of serious reform
even when faced with possible disintegration. Prime Minister
David Camerons desire to fundamentally change Great
Britains relationship with the EU has met with stubborn refusal in Brussels to consider anything but cosmetic modifications
to existing treaties.37 For example, Cameron asked for national
parliaments to have the ability to block legislation originating
in Brussels. What he got instead was a promise that if more
than 50 percent of EU parliaments raise concerns over an EU
proposal, the EU Commission will reconsider it. This red

Rise of Populist Parties

Unwittingly, the EU has become a driving force behind
the rise of populist parties in Europe. These parties come
from across the political spectrumfrom the far left to
the far right. Often they have nothing in common except
for their opposition to further European integration and a
desire, at the very minimum, to repatriate some of the EU
powers back to nation states. They are present in all EU
countries and hold, remarkably, one-third of all seats in the
European Parliament.
While some of these parties are more respectable than
others, the EU often paints them with the same brush.
Thus, people who happen to believe that the EU is a threat
to liberal values, such as democratic accountability, are
often treated with as much disdain as people who happen
to believe in authoritarianism.
Consider the former vice president of the EU
Commission, Margot Wallstrm. While visiting the
Czech city of Terezin, which used to be a site of a Nazi
concentration camp during World War II, Wallstrm
linked the rejection of the EU Constitution to the return
of the Holocaust. She said, They [opponents of the EU
Constitution] want the European Union to go back to the
old purely intergovernmental way of doing things. I say
those people should come to Terezin and see where that
old road leads.29
So, what are the reasons for the rise of populism in
Europe? First, many Europeans, but especially the citizens of well-functioning democracies such as Denmark,
Holland, and Great Britain, resent the democratic deficit.
They feel that far too many decisions impacting their lives
are being made in Brussels by people who are unelected,
unknown, and unaccountable. This feeling is not as strong
in the East, where democratic accountability is recent and
deeply imperfect, but it is growing in countries such as the
Czech Republic and Hungary.
Second, many Europeans see the EU as having failed
in some of its core competences, including monetary and
immigration policies. The Westerners do not wish to continue subsidizing the inefficient south, while the Easterners
5

card process is immensely difficult to implement and, probably, legally unenforceable.38 Considering that the EU has
refused to reform with the British referendum on EU membership hanging, so to speak, over its head, whats the likelihood
that the EU will reform once the danger of Brexit has passed?
The real problem for those who wish to see EU reforms
is that the EU establishment has a strong incentive to centralize decisionmaking in Brussels rather than decentralize.
Quite aside from the ideological commitment of the EU
bureaucrats to the creation of a United States of Europe,
which they may or may not believe in, centralization of
power is in their interest. It increases their power and
resources.
Yet, a blueprint for reform is available, for there is a
European country that has not experienced international
conflict since 1815 or civil strife since 1848; a country
that trades freely with the EU, but also with the rest of the
world; a country that is richer than all EU countries, except
for Luxemburg; and a country that maintains a world-beating
degree of domestic harmony and democratic accountability;
a country that is not a part of the EUs political or economic
integration process, but which deals with the EU at an intergovernmental level via a series of bilateral treaties. That
country is Switzerland.

GDP per capita in North Dakota, which is Americas richest state, is only slightly more than 2.1 times higher than
that in Mississippi, Americas poorest state.45
By definition, regulations emanating from Brussels must
be applied equally throughout the EU. Unavoidably, regulations that add to the cost of production have a more deleterious effect on less productive ex-communist countries than on
more productive Western European nations. Eastern countries
are growing increasingly resentful of regulations, which are
often made to enhance the already high standards that exist in
the West and which are often meant to protect the interests of
Western producers.
Conclusion
I started my career as a believer in the European integration process. Central Europe, where I was born, was impoverished by communism, and membership of the EU seemed
like a solution to many economic and political problems
in ex-communist countries. Over time, I started to see the
costs as well as the benefits of the EU. It was only much
later that I came to believe that the costs of EU membership
far outweigh its benefits. While this was a gradual process,
one event greatly helped to convince me that the EU has
become pernicious and must be stopped. That event was the
EUs handling of the French and Dutch referenda on the EU
Constitution in 2005.
After the people of France and Holland rejected the EU
Constitution in their respective referenda, the EU establishment relabeled it as the Lisbon Treaty and adopted it
nonetheless. This act of supreme arrogance convinced me
that the EU establishment held the people of Europe in
utter contempt and that it would stop at nothing in order
to pursue its agenda of an ever closer union. It showed
me that the EU bureaucrats see themselves as a class of
wise experts who know how society ought to be organized.
The memories of my childhood behind the Iron Curtain
flooded back. And that brings me to my final point: does
an enlightened class of technocrats have a right to make
people free or happy or, simply, better off?
As I have explained, the EU is not only failing to
address Europes problems, it exacerbates them. Moreover,
it seems to be unable and unwilling to reform. With every
electoral cycle, establishment parties committed to further European integration are growing weaker and anti-EU
parties are getting closer to power. The EU has been very
successful in plodding along, but its rearguard action cannot succeed indefinitely. At some point, one of the EUs 28
member states will elect an anti-EU government. I fear that
the longer the EU establishment ignores its opponents, the
more belligerent the latter will become.
As such, a negotiated parting of ways between the EU
and countries that feel they can do better on their own
makes more sense. Of course, there is no guarantee that all
of the former EU members will make the right choices. I
can imagine Prime Minister Boris Johnsons Great Britain
becoming a global free-trade superpower. But, I can also
imagine President Marine Le Pens France hunkering down
behind a wall of protective tariffs. That said, I would rather
see individual nation states make wrong choices than to

European Unions Greatest Achievement?

It is often claimed that the EU expansion into ex-communist
countries was one of its greatest accomplishments. As one
author notes, the prospect of European integration created
pressure to reform Eastern European economies and strengthen the rule of law.39
That is partially true. In Slovakia, for example, the
prospect of the EU membership certainly played a part in
defeating an authoritarian and protectionist government
and replacing it with one committed to democratic and economic reforms.40 In the economically free Estonia, on the
other hand, EU membership meant reimposition of tariffs
and a consequent partial decline in economic freedom.41
Still, there is no denying that all ex-communist members of the EU enjoy a higher degree of political freedom
than non-EU ex-communist countries, such as Serbia,
Montenegro, Macedonia, and Ukraine, let alone the politically unfree Belarus.42 Electoral shenanigans are rare and
governments come and go in accordance with the will of
the people. That is, after all, why they were admitted into
the EU in the first place.
But, when it comes to the creation of liberal democracy,
the picture is, at best, mixed. In general, the rule of law has
improved and corruption declined in ex-communist countries
during the EU accession talks. Unfortunately, these salutary
trends have stalled since the ex-communist countries entered
the EU.43 Indeed, some evidence suggests that disbursement of
Structural and Cohesion funds has exacerbated ex-communist
countries problem with corruption.44
Last, but not least, consider the impact of EU regulations on ex-communist countries. Productivity across the
EU differs widely. In 2015, for example, GDP per capita in
Luxembourg, the EUs richest state, was 14.9 times higher
than that in Bulgaria, the EUs poorest state. In contrast,
6

15. Peter Spence, The EUs Dwindling Importance to UK Trade

in Three Charts, Daily Telegraph (London), June 26, 2015, http://
www.telegraph.co.uk/finance/economics/11700443/The-EUsdwindling-importance-to-UK-trade-in-three-charts.html.
16. Oxfam International, Dumping on the World: How EU
Sugar Policies Hurt Poor Countries, Oxfam Briefing Paper no.
61 (March 2004), https://www.oxfam.org/sites/www.oxfam.org/
files/bp61_sugar_dumping_0.pdf.
17. F. A. van Beek, Discarding in the Dutch Beam Trawl
Fishery, International Council for the Exploration of the Sea
(1998), Flanders Marine Institute, www.vliz.be/imisdocs/publica
tions/138419.pdf.
18. Dalibor Rohac, How the European Union Corrupted Eastern
Europe, National Review, March 26, 2014, http://www.national
review.com/agenda/378798/how-european-union-corrupted-east
ern-europe-dalibor-rohac.
19. Benjamin Fox, Auditors Refuse to Sign Off EU Spending
For 20th Year in a Row, EU Observer (Brussels), November 6,
2014, https://euobserver.com/news/126405.
20. Simon Tilford, John Springford, and Christian Odendahl,
Has the Euro Been a Failure? Centre for European Reform,
January 11, 2016, https://www.cer.org.uk/publications/archive/
report/2016/has-euro-been-failure.
21. Justin Huggler, French Economy Minister Calls for Full
Fiscal Union in Eurozone, Daily Telegraph (London), August
31, 2015, http://www.telegraph.co.uk/finance/economics/
11835614/French-economy-minister-calls-for-full-fiscal-unionin-eurozone.html.
22. Voice of America, Anti-Migrant Protesters Rally in Several
Major European Cities, VOA, February 6, 2016, http://www.
voanews.com/content/anti-migrant-protesters-rally-europeancities/3179948.html.
23. Consolidated Version of the Treaty on the Functioning of the
European Union, Eurlex, http://eur-lex.europa.eu/legal-content/EN/
TXT/?uri=celex%3A12012E%2FTXT.
24. Country Responsible for Asylum Application (Dublin), EU
Commission, http://ec.europa.eu/dgs/home-affairs/what-we-do/
policies/asylum/examination-of-applicants/index_en.htm.
25. Matthew Holehouse, EU to Fine Countries Hundreds of
Millions of Pounds for Refusing to Take Refugees, Daily
Telegraph (London), May 3, 2016, http://www.telegraph.co.uk/
news/2016/05/03/eu-to-fine-countries-that-refuse-refugee-quota/.
26. European Commission, European Citizenship, Standard
Eurobarometer no. 77 (Spring 2012), http://ec.europa.eu/public_
opinion/archives/eb/eb77/eb77_citizen_en.pdf.
27. Bruno Waterfield, Jean-Claude Juncker Profile: When it
Becomes Serious, You Have to Lie, Daily Telegraph (London),
November 12, 2014, http://www.telegraph.co.uk/news/worldnews/europe/eu/10874230/Jean-Claude-Juncker-profile-When-itbecomes-serious-you-have-to-lie.html.
28. Results of the 2014 European Elections, EU Parliament, http://
www.europarl.europa.eu/elections2014-results/en/turnout.html.
29. Raphael Minder, Commissioner under Fire Over Nazi
Speech, Financial Times (London), May 13, 2005, http://www.
ft.com/intl/cms/s/0/11f37e2e-c34b-11d9-abf1-00000e2511c8.
html.
30. Marian L. Tupy and Richard Sulik, The Limits of European
Solidarity, Wall Street Journal, February 15, 2012, http://www.
wsj.com/articles/SB100014240529702047953045772228333329
28436.
31. Tony Barber, The Decline of Europe Is a Global Concern,
Financial Times (London), December 21, 2015, https://next.ft.
com/content/ddfd47e8-a404-11e5-873f-68411a84f346.
32. Lionel Beehner, European Union: The French and Dutch
Referendums, Council on Foreign Relations, June 1, 2005, http://
www.cfr.org/france/european-union-french-dutch-referendums/
p8148.

force them to remain in the EU, thus increasing resentment

and risking greater disruption down the line.
The EU has become a large pressure cooker with
no safety valve. Large parts of Europe suffer from low
growth, high unemployment, rising deficits, and stratospheric debts. To make matters worse, tensions between
the people of Europe are increasing. Some feel that they
are being forced to adopt policies they do not like, while
others feel that they have to unfairly subsidize people with
whom they have nothing in common. The EU could turn
down the heat by repatriating many of its competences
back to the nation states. That, alas, is not in its nature.
The EU risks imploding in an uncontrolled way and if that
happens, everyone will lose.
Notes

1. Delegation of the European Union to the United States, What

is the European Union? http://www.euintheus.org/who-we-are/
what-is-the-european-union/.
2. Doug Bandow, A Look Behind the Marshall Plan Mythology,
Investors Business Daily, June 3, 1997, http://www.cato.org/publica
tions/commentary/look-behind-marshall-plan-mythology.
3. John Gillingham, European Integration, 19502003:
Superstate or New Market Economy? (Cambridge: Cambridge
University Press, 2003), p. 197.
4. Richard Reichel, Germanys Postwar Growth: Miracle or
Reconstruction Boom, Cato Journal 21, no. 3 (Winter 2002):
42742.
5. The Abolition of Customs Barriers to Trade in the EU,
Europedia, http://www.europedia.moussis.eu/books/Book_2/
3/5/1/1/?all=1.
6. Natalie Chen and Dennis Novy, Barriers to Trade Within
the European Union, University of Warwick, https://www2.
warwick.ac.uk/fac/soc/economics/research/centres/eri/bulletin/
2008-09-3/chen-novy/.
7. The European Single Market, EU Commission, http://
ec.europa.eu/growth/single-market/index_en.htm.
8. Bolkestein Directive to Stay, but Will be Watered Down,
Euractiv, March 23, 2005, http://www.euractiv.com/section/
innovation-industry/news/bolkestein-directive-to-stay-but-willbe-watered-down/.
9. Matthew Holehouse, EU to Launch Kettle and Toaster
Crackdown after Brexit Vote, Daily Telegraph (London), May
11, 2016, http://www.telegraph.co.uk/news/2016/05/10/eu-tolaunch-kettle-and-toaster-crackdown-after-brexit-vote2/.
10. Szu Ping Chan, Germany Pleads with UK to Remain in
EU to Fight Red Tape, Daily Telegraph (London), July 4,
2015, http://www.telegraph.co.uk/finance/economics/11718554/
Germany-pleas-with-UK-to-remain-in-EU-to-fight-red-tape.html.
11. Lisa Urquhart, Regulations Will Make Europe Less
Competitive, Financial Times (London), November 18, 2005,
http://www.ft.com/intl/cms/s/0/8954808c-57d7-11da-8866-00000e
25118c.html.
12. Gregory Mankiw, Economists Actually Agree on This: The
Wisdom of Free Trade, New York Times, April 24, 2015, http://
www.nytimes.com/2015/04/26/upshot/economists-actually-agreeon-this-point-the-wisdom-of-free-trade.html.
13. World Trade Organization, The Text of the General
Agreement on Tariffs and Trade (Geneva: WTO, 1986),https://
www.wto.org/english/docs_e/legal_e/gatt47.pdf.
14. Jayson Beckman, U.S. Beef Exports to the EU Grow Despite
Trade Barriers, United States Department of Agriculture, April 6,
2015, http://www.ers.usda.gov/amber-waves/2015-april/us-beefexports-to-the-eu-grow-despite-trade-barriers.
7

33. European Parliament, Lisbon European Council 23 and

24 March 2000: Presidency Conclusions, http://www.europarl.
europa.eu/summits/lis1_en.htm.
34. Sweden Admits Lisbon Agenda Failure, June 3, 2009,
Euractiv, http://www.euractiv.com/section/eu-priorities-2020/
news/sweden-admits-lisbon-agenda-failure/.
35. European Commission, Europe 2020: A Strategy for Smart,
Sustainable and Inclusive Growth, March 3, 2010, http://eur-lex.
europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:2020:FIN
:EN:PDF.
36. Ibid.
37. British Broadcasting Corporation, EU Talks: Cameron Says
UK Will Get New Deal in 2016, December 18, 2015, http://
www.bbc.com/news/uk-politics-eu-referendum-35135049.
38. Mark Wallace, The Gap between What Cameron Asked
For and What He Got, Conservative Home, February 3, 2016,
http://www.conservativehome.com/thetorydiary/2016/02/thegap-between-what-cameron-asked-for-and-what-he-got.html.

39. Dalibor Rohac, I Used to be Eurosceptic. Heres Why I

Changed My Mind, American Enterprise Institute, March 30,
2016, https://www.aei.org/publication/i-used-to-be-euroskepticheres-why-i-changed-my-mind/.
40. European Parliament, Slovakia and the Enlargement of the
European Union, Briefing no. 13 (2000), http://www.europarl.
europa.eu/enlargement/briefings/13a2_en.htm.
41. Marian L. Tupy, At What Cost EU Membership? Wall
Street Journal, April 29, 2012, http://www.wsj.com/articles/
SB10001424052702303916904577373773633684722.
42. Freedom House, Freedom in the World 2016, https://
www.freedomhouse.org/report-types/freedom-world.
43. World Bank, The Worldwide Governance Indicators,
http://info.worldbank.org/governance/wgi/index.aspx#home.
44. Rohac, How the European Union Corrupted Eastern
Europe.
45. World Bank, GDP per capita, PPP (current international
$), http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD.